Omnichannel strategy: How insurance companies ensure a successful path into the future
Published May 15, 2024
- Customer Experience
- Insurance
In the age of the hybrid customer, maximum customer satisfaction is becoming critical to the continued success and ability to move confidently into the future. Going forward, insurers will have to place the hybrid customer and their expectations of inspiring customer experiences strictly at the center of their actions – and this goes far beyond communication, marketing and sales. After all, customer needs are becoming increasingly individualized – and hybrid customer journeys are becoming increasingly diverse.
The consistent implementation of an omnichannel strategy is now a decisive success factor in order to sustainably position oneself as a relevant player in the insurance market. For insurers, this means fully recognizing the potential of an omnichannel customer journey and considering it a must rather than a nice to have.
Lever for the future #1
Convenience as the top priority
Optimization of the customer journey to meet customer needs
TODAY: Insurers have always had a product-centric approach and small-scale, inward-looking thinking in terms of lines of business and sales channels. Marketing and sales focus on separate product solutions that serve individual customer needs. The result is a confusing multitude of individual solutions that are presented to prospective customers in a wide variety of apps and platforms. The core problem is that insurers are yet to adopt a holistic view of their sales channels and therefore do not design their services in a comprehensive manner. But hybrid insurance customers primarily want simplicity, transparency, and flexibility in products and services. In the insurance industry, this still has room for improvement. Although some insurers are beginning to put the hybrid customer at the center of their actions, there is still a long way to go before maximum customer centricity is achieved.
FUTURE: In the future, insurers will think in terms of lifeworlds instead of lines of business. The overriding maxim is therefore convenience for the customer. In the future, insurance will be connected, flexible and needs-based. Customers will switch seamlessly between digital and analog channels. The credo is: “channel-agnostic, customer-centric”. Regardless of which touchpoint customers use to contact insurers, the customer journey is always optimized to their needs, and they get the information, advice, and service they require. In addition to all digital touchpoints, the human factor also has a high priority, especially when it comes to providing advice and concluding contracts.
- Customers are free to choose the time, place, and channel for purchasing products and services and communicating with their insurer. Insurers who know exactly who their customers are, what they need, and what channels they use can increase customer satisfaction through personalized experiences and services with absolute convenience.
- By positioning themselves in the lifeworlds of their customers, insurers can bundle and connect offerings and drive the development of new business models centered around customer needs such as mobility, retirement planning, and coverage. For example, customers can obtain a family insurance package that includes liability insurance, death benefits, and supplementary health insurance.
- The result is a more efficient and convenient way to provide consulting services for every customer need. This saves valuable sales time and unnecessary costs through personalized approaches and offer concepts.
- The insurance industry must quickly move away from the company-centric view of product development and placement (inside-out), which is geared exclusively to achieving internal goals. Instead, the focus must be on the customer with their requirements and expectations and on developing suitable products, services and communication strategies. The most important sources of innovation are no longer the market and competition, but the needs of the customer.
- For a seamless customer journey, insurers need to make a major internal change in terms of how they design and quote their products and services. Going forward, the central quoting system must be able to combine products from different lines and bundle them into personalized solutions through a shopping cart. The flexibility of insurance products must also be increased in the interests of maximum customer centricity.
- Insurers must rapidly expand their data competencies and become data companies. The correct handling of data is becoming critical to success. Only then can insurers provide their services and products at every touchpoint that suits the customer and integrate them seamlessly into ecosystems and platforms.
Lever for the future #2
Omnichannel rather than multichannel strategy
Consistent customer experience with omnichannel customer journey that delivers a seamless experience
TODAY: Insurers focus primarily on the respective department or organizational unit, which follows its own (often historically grown) processes and channels. Inside the company, the corresponding processes are mostly unknown or even considered competition. In this way, insurers offer their customers a variety of communication channels, but these are only tailored to individual processes and coexist in a multichannel strategy. The result is fragmented communication that does not meet the needs of the customer. Moreover, because customer data is not connected and cannot be provided in real time, a multitude of data silos is created. This makes marketing activities and the best possible customer approach more difficult.
FUTURE: Insurers are focusing on a fully integrated omnichannel strategy. This enables a fully digitally enabled, connected and seamless customer journey across all contact points and channels. Even when switching channels, customers benefit from a seamless, consistent customer experience and can rely on constant support from their insurer. Obstructive data silos are eliminated so that the right data, at the right time, is available in the right place and the best possible user experience is provided.
- Omnichannel strategies dramatically increase customer satisfaction and conversion rates. Advanced omnichannel customer journeys and maximum customer centricity offer the possibility of multimodal, seamless and demand-driven insurance and pension provision, thus creating added value for customers.
- By linking all sales channels and touch points, insurers receive standardised data. This data is collected at every customer contact and stored in the back-end. Employees can access it at any time, facilitating seamless customer experience, marketing, sales and support.
- Insurance companies that make omnichannel their business today are minimising the risk of increased competition from innovative companies. They are differentiating themselves from their competitors and gaining a significant competitive advantage through a well-designed customer contact management system.
- An efficient omnichannel strategy must support systematic lead management. After all, not every customer inquiry results in a deal. Insurance customers often use different channels for their research and various offers are generated. All of this information must be brought together and made available to the sales employee or agent as a qualified lead.
- Insurers need an integrated IT infrastructure that must enable the seamless integration of all channels. The systems must communicate with each other in real time in order to optimally engage the customer at any touchpoint. This requires centralized data management, which insurers can outsource to external IT partners if they lack the internal capabilities.
- In order to align all processes with an omnichannel strategy, existing silos must be torn down and the entire organizational structure of a company must be adapted. This transformation must inevitably be reflected in the corporate culture, as employees must support this transformation. For insurance companies, it is therefore important to raise awareness among the workforce at an early stage and to communicate transparently.
Lever for the future #3
Digitally enabled customer journey for insurance sales
Digital transformation enables customer centricity and efficiency
TODAY: Customers experience a consistently high level of digitization from GAFA, but also InsurTechs and comparison platforms. In the insurance industry, however, many processes are not yet digitally enabled. Insurers, for example, are finding it difficult to transfer existing and functioning analog touchpoints to the digital world and to implement them in a digitally enabled customer journey. From the conclusion of a contract to claim notifications and a large number of other customer contacts, some processes still involve analog communication steps, which customers perceive as disruptive and irritating as they are increasingly used to a fully digital user experience, preventing insurers from exploiting the full potential of dark processing.
FUTURE: The insurance company of the future will have fully digitally enabled insurance operations with end-to-end and highly automated processes. Existing analog channels will be integrated into the omnichannel strategy so that any data is available digitally. Likewise, customers can use digital touchpoints to make changes to master data or contracts independently and automatically. In this way, insurers ensure the best possible intuitive user experience throughout the customer journey, regardless of the customer’s chosen touchpoint. In addition to improved services, the market will be dominated by innovative, flexible and customer centric as well as digital and integrated business models. Alliances and collaborations between new and traditional providers offer a spectrum of multimodal, bundled solutions as well as seamless and sustainable coverage and provision solutions.
- Digital transformation enables customer centricity with maximum efficiency: Offers and contact options for customers can be rethought or optimized at the product and service level. At the same time, digitally enabled claims, benefits, and service processes increase transparency, speed, and efficiency on the part of insurers as well. Administrative costs are improved by reducing resource requirements and increasing capacity utilization.
- Digital sales channels can be used to collect data that enables the creation of hyper-personalized and even more targeted offers. By merging digital and analog sales channels, insurers can increase the potential of cross- and upselling, secure sales success over the long term, and at the same time expand supra-regionally in the long term.
- Digital transformation and automation can support sales. The added digital contact options give insurers more time and flexibility to devote to their core task – customer care (e.g. videotelephony, which enables quality advice without long commutes).
- Insurers who do not just rely simply on their existing customer interfaces and instead pay attention to supposed trends such as the metaverse have an advantage. In the long term, it cannot be ruled out that customers will increasingly spend time in virtual communities and also want to be addressed there. In the future, insurers could develop products and services together in the metaverse in this way and test them virtually.
- Insurers must adapt their sales forces, products, and customer data in the context of digital transformation and expand them accordingly. This means that all customer communication, whether it is regarding sales, services or claims management, must be thought of in digital and mobile terms and be able to support an omnichannel approach.
- In order for insurers to successfully embrace digital transformation, they need uniform and binding data standards. Due to processes and system landscapes that have grown over time there are too many different interfaces and data formats that hinder compatibility and cooperation as well as integration between the offers and actors.
- Insurers that fail to fully embrace digital transformation will lose their competitive advantage and their customers in the long term.
The five touchpoints for a sustainable omnichannel journey in the insurance industry
The demands of hybrid customers, the transformation of the customer journey and the general digital transformation result in five fields of action for the insurance industry of the future.
To meet the needs of hybrid customers and market requirements, insurers must develop new data-based business models. At the same time, they have the opportunity to develop new business areas. This is already leading to hyper-personalized products and services, such as data-driven prevention through the introduction of telematics tariffs in motor vehicle insurance. In parallel, business areas are emerging where insurers are using their data expertise to optimize wind turbine maintenance using IoT (smart sensors), data analytics, and AI to proactively avert potential claims.
In order to be able to offer customer-centric, cost-effective and at the same time profitable solutions in the future, insurers must optimize historically grown processes and system landscapes with a focus on the requirements of omnichannel customer communication or completely rebuild them. The end result is the greatest possible automation of claims, benefits and service processes, which on the one hand increase customer satisfaction and on the other optimize administrative costs through their efficiency.
New digitally enabled technologies enable smart applications and solutions in the insurance industry. All activities are geared to customers’ needs, search and information behaviors, and willingness to buy in the sense of an omnichannel strategy. In order to respond quickly to rapidly changing needs, products, services, and solutions will emerge in shorter innovation cycles, for which insurers must operate in agile teams within their organization. They can already learn the necessary mindset from FinTechs and InsurTechs or enter into cooperations with them.
The implementation of ESG guidelines holds great opportunities for implementing sustainable investments in insurance portfolios and making a measurable contribution to greater sustainability. By integrating sustainability preferences into advice and closing channels, a first major step has been taken towards sustainably classified investments, which has implications for directing capital flows. This puts insurers and the development of their product portfolios under pressure – because customers with sustainability preferences also expect products that meet them. Moreover, expectations in the sustainability context are not only directed at insurance products, but increasingly also at insurance companies as an organization.
The hybrid customer with their individual customer journey demands omnichannel communication. This offers THE opportunity to increase customer satisfaction through hyperpersonalized offers and services with absolute convenience for customers. Their needs are front and center and they are afforded a seamless, personalized and customized customer experience from initial information gathering to claim.
Author
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Uta Niendorf
Partner – Germany, Hamburg
Wavestone
LinkedIn